Discussion:Interest on Schedule C
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| Revision as of 20:12, 19 November 2007 Mcclstev (Talk | contribs) (If this is inter) ← Previous diff |
Current revision Mtmckeecpa (Talk | contribs) (deductible under) |
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| + | {{ForumReplyPost|UserID=Mtmckeecpa|Date=19 November 2007|Text=deductible under 163(h)(2)(A), allocable to trade or business expense, late payroll taxes.}} | ||
Current revision
Discussion Forum Index --> Basic Tax Questions --> Interest on Schedule C
Discussion Forum Index --> Tax Questions --> Interest on Schedule C
| 18 November 2007 | |
| I cannot find any information on deducting interest paid to IRS for back Payroll Taxes. I have seen where a CPA took the IRS interest on Schedule C, other expenses. I know penalties are not deductible but have been told that interest can be because it is an expense of the Company. | |
Death&Taxes (talk|edits) said: | 19 November 2007 |
| I see little problem with this. This is different from the circumstances in Redlark. | |
| 19 November 2007 | |
| Actually, Redlark was overturned by Robinson (119 TC 44). | |
| 19 November 2007 | |
| I don't believe it is deductible. According to RIA Tax Desk Analysis:
"Personal interest includes interest... paid on underpayments of individual federal, state or local income taxes and on indebtedness allocated to the payment of those taxes under the allocation rules, regardless of the source of the income generating the tax liability, i.e., even though the income may have arisen in a trade or business." | |
| 19 November 2007 | |
| Jdugancpa: "I don't believe it is deductible. According to RIA Tax Desk Analysis [snip]"
Keep in mind that your RIA reference (and the Robinson case) only addresses income, estate, and gift tax, not payroll tax. | |
Death&Taxes (talk|edits) said: | 19 November 2007 |
| I have had similar circumstances come up on audit on interest paid on local Business Privilege taxes, which are based on both profits and sales, and never had it questioned. This is a tax imposed on business; for the second local tax based on income, there is no deduction. The OP's question is about interest from a tax that is not based on income at all. | |
| 19 November 2007 | |
| If this is interest expense paid by the trade or business on back payroll taxes it incurred it would be deductible under IRC Section 163. It could be non deductible as personal interest if paid by and individual and the interest was allocable to a trade or business.
The OP didn't state the type of entity involved, if it were a C Corp, it could deduct interest it incurred on back payroll taxes or income taxes for that matter. | |
Mtmckeecpa (talk|edits) said: | 19 November 2007 |
| deductible under 163(h)(2)(A), allocable to trade or business expense, late payroll taxes. | |
